Supreme Court: Refund RFID fees paid by vehicle owners

MANILA, Philippines – Vehicle owners who paid P350 for a Radio Frequency Identification (RFID) sticker should get a refund after the Supreme Court declared null and void the RFID project between government and Stradcom Corporation (Stradcom).

In a 30-page decision written by Chief Justice Maria Lourdes Sereno, the High Court said, “The RFID fees collected during the implementation of the RFID Project prior to the issuance of this Court’s status quo ante Order are…ordered refunded to the payors thereof.”

The Court declared the 2009 memorandum of agreement between government and Stradcom void because it had no public bidding. On January 12, 2010 it issued a status quo ante order which halted implementation of the RFID project.

Under the project, all vehicles would be required to install stickers with a microchip that stores vehicle information.

The project was supposed to use automatic identification technology where digital data encoded in an RFID tag or what’s called a “smart label” are captured by a reader using radio waves.

The Land Transportation Office (LTO) was supposed to install RFID tags on an estimated 4,760,593 vehicles, raising an expected P1.6 billion in revenues.

The RFID tag, seen to last for 10 years, was supposed to be obtained from Stradcom.

No need for bidding?

Stradcom had argued that because the RFID project was an enhancement of the current motor vehicle registration system, it did not need to go through public bidding.

Bayan Muna Representatives Satur Ocampo and Teodoro Casiño, Gabriela Women’s Party Representative Liza Maza, Anakpawis Representative Joel Maglungsod, Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide (Piston), and the Automobile Association of the Philippines (AAP) told the Supreme Court in their petition that the RFID project violates provisions of the Government Procurement Act which requires competitive public bidding.

On June 16, 2009, the RFID MOA was entered into between Stradcom and the government through the Department of Transportation and Communications (DOTC) and the LTO.

Contrary to Stradcom’s claims, however, the Court said the MOA is not a mere enhancement but a substantial amendment to the Build-Own-Operate (BOO) agreement. The project is part of a long-term strategic plan to modernize the land transportation systems in the country.

In 1997, the DOTC/LTO awarded to Stradcom a contract to construct and operate an information technology structure called the LTO IT Project BOO Agreement. It made Stradcom the exclusive information technology provider of DOTC/LTO.

The Court said that under the Implementing Rules and Regulations of the BOT Law, the RFID project does not qualify as an allowable contract variation of the BOO Agreement since it involves an increase in the agreed fees, tolls, and charges exacted on the public.

“This charge was not contemplated in the original contract and is not an increase allowed under the formula provided in Article 14 of the BOO Agreement,” the Court pointed out. – Rappler.com